Mastercard acquiring the Israeli tech personalization platform Dynamic Yield from McDonald's

Mastercard announced the purchase of Israeli tech start up Dynamic Yield from US fast food giant McDonald’s, which it acquired only two years ago for about $300 million. The companies did not disclose the cost of the interaction, but it is believed to be higher than the amount paid by the fast-food franchise company on its acquisition.

Dynamic Yield is considered to be one of the leading personalization platforms in the world. Founded in 2011 by Liad Agmon and Omri Mendellevich, Dynamic Yield’s service uses machine learning algorithms and developed an AI omnichannel personalization engine to help businesses tailor their website to individual consumers according to behavioural patterns.

McDonald’s had hoped to boost sales using the technology to create drive-through menus that change based on the time of day, weather, current restaurant traffic, and trending menu items, and display additional items based on customers’ current selections at ordering kiosks.

Dynamic Yield had remained an independent company based in Tel Aviv and New York after the McDonald’s purchase. The company said it has come to work with over 400 clients across the retail, financial services, travel, and restaurant industries. The Israeli company had previously raised close to $83 million from investors including Korea’s Naver Corp., Israeli private equity fund Viola, and Israeli VC fund Vertex Ventures.

McDonald’s became one of the first brands to integrate decision technology into its restaurants following its purchase of Dynamic Yield. The purchase in 2019 was McDonald’s largest company acquisition in 20 years. Under McDonald’s ownership, Dynamic Yield doubled its revenue and expanded its customer base across verticals. To date, Dynamic Yield’s technology has been deployed to drive-thrus and ordering kiosks in markets including the U.S., Australia, and Canada.

However, it was announced earlier this year that the golden arches giant was looking for a new home for the Israeli start-up. On Tuesday, Mastercard announced the deal, which is due to close in the first half of 2022. The details of the deal have not yet been released. As part of the acquisition, the company's current CTO, Uri Bauer, will be appointed to CEO of Dynamic Yield while Liad Agmon, the current CEO and one of the founders, will stay on in an advisory capacity.

Mastercard said in an announcement Tuesday that Dynamic Yield’s technology was “a natural addition” to the financial services company’s services “that help brands deliver more effective and trusted customer experiences across channels.”

“The notion of going into a store or opening a web page to find an experience perfectly tailored to you is no longer far-fetched. It’s a reality that more brands are deploying, and more consumers expect.

“With Dynamic Yield’s expertise and our scale and relationships, we’ll be able to bring the connections between the end consumer and our customers to new heights,” said Raj Seshadri, president of data & services at Mastercard.

The acquisition is expected to close in the first six months of next year.

On Tuesday morning, McDonald’s shares were up less than 1% while Mastercard’s stock rose nearly 2%.